Overview of the Four New Codes: India’s four new labour codes—Code on Wages, Industrial Relations Code, Code on Social Security, and Occupational Safety, Health, and Working Conditions Code—aim to consolidate and modernize labour regulations for a dynamic economy.
- Code on Wages (2019):
- Unified Definition of Wages: A standard definition across all labour laws, affecting payroll structures and calculations for provident fund, gratuity, and bonuses.
- Minimum Wage: Minimum wages will apply to all sectors, and a national floor wage will be set by the central government. This simplifies compliance for businesses across states with varying minimum wage levels.
- Industrial Relations Code (2020):
- Greater Flexibility for Employers: Companies with up to 300 workers can now lay off workers without government approval (previously, the limit was 100 employees).
- Stricter Rules for Strikes: Employees must give a 60-day notice before striking, which gives businesses more time to resolve disputes and minimize operational disruption.
- Code on Social Security (2020):
- Gig and Platform Workers Covered: Gig workers, including drivers for ride-hailing platforms and food delivery personnel, are included in social security coverage like pensions and health benefits.
- Extended Welfare: Traditional benefits like provident fund, ESI, and gratuity are available to contract and fixed-term employees as well, ensuring greater worker security.
- Occupational Safety, Health and Working Conditions Code (2020):
- Enhanced Safety Measures: Employers are responsible for providing safer workplaces with better health conditions, particularly in hazardous industries.
- Working Hours and Conditions: Strict regulations on working hours (48 hours a week) and the introduction of safety committees in large establishments.
Impact on Businesses:
- Cost Implications: With the inclusion of gig workers and contract labour under social security schemes, businesses will need to adjust budgets for contributions toward employee benefits.
- Compliance Simplification: Fewer forms and registers, and consolidation of rules make compliance easier for businesses operating across multiple states.
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It is important to note that labour laws can be complex and subject to change. Please consult with lawyer to ensure that you are complying with all applicable laws and regulations.